How Banks Treat Competitors
As you know I’m a great fan of Zopa. I started with a post called Peer-to-Peer Lending – Zopa in July and have posted several since. Just click the “Zopa” tag.
Have the banks found a way to stop this upstart competitor? This has just been posted on the Zopa web site.
What’s happened to debit cards?
You may know that in order for a business to receive debit card payments, a merchant services licence is required. When we started out, our business model was unique and something of an unknown; as such, RBS Worldpay (the body associated with our banking partner that grants the ability to receive debit card payments) declined our application for a merchant services licence. We felt that debit card funding would be a useful service to offer our lenders, and found an alternative solution with the support of a third party in the anticipation that it would be a short term arrangement.
Given Zopa’s growth – and thanks to all your fundings – this year we thought it an appropriate time to revisit the application for our own merchant licence, with a solid track record to prove both that our model is working and that debit card business is popular with very little risk of liability to the merchant services provider. Unfortunately, despite our best efforts RBS Worldpay refuse to accommodate Zopa’s model, and have openly shown no appetite to work with us in coming to an arrangement or indeed in understanding our business. Equally, our volumes are such that the short-term process is no longer sustainable so it’s become unavoidable for us to draw the debit card funding service to a close.
The transfer will now take two days as opposed to being virtually instantaneous.
Why is it that banks assume that they are special? They are no different to any other company and should live within the same rules. But they don’t!
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The Anonymous Widower 
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